The ability to listen and learn from one another has always been vital in parliament, in business and in most aspects of daily life. But at this particular moment in time, as national and global events continue to reiterate, it is uncommonly crucial that we forge new channels of communication and reinforce existing ones. The following article from Moneyline is an attempt to do just that. We would welcome your thoughts on this or any other Parliamentary Review article.
Rt Hon The Lord David Blunkett
Rt Hon The Lord Eric Pickles
THE PARLIAMENTARY REVIEW
Highlighting best practice
24 | MONEYLINE
Shiona Crichton, COO
Based in Lancashire but operating nationwide, Moneyline
is a not-for-profit lender that exists to serve low-income
households by providing affordable, low-value short-term
loans and small sum savings accounts. Shiona Crichton, their
COO, has been a part of the team for five years. She explains
that the company provides mid-cost credit, which is focused on
creating speed, flexibility and choice for those who require it.
It’s Monday, and your washing machine has broken down; you have school uniforms
for your three children that need to be cleaned. For many of us, this would not be an
emergency – we can just go and buy a new one. For the lowest-income households
with no savings, no overdraft and a thin credit score, however, the options are more
limited. Currently, their credit options are often restricted to high-cost credit providers
such as rent-to-own, doorstep credit and payday lenders.
At least 13 million people in the UK are financially excluded by mainstream banks
and lenders, as they either want to borrow small sums of money or have a thin credit
file. Many of them have unreliable streams of income, thanks to low job security, and
therefore pay a premium for access to credit.
The Moneyline philosophy
Our founding was grounded in the belief that credit, when provided responsibly, is
vital when it comes to helping people spread the cost of something they need. Access
to affordable products should not be a privilege.
Many of our customers save alongside borrowing – they build a savings pot by
rounding up their loan repayments. It’s a simple, flexible and effective strategy, and
one that’s led to many customers who have been regarded as “unable to save” doing
Our customer-first approach delivers a dignified, respectful and responsible
experience that doesn’t judge or patronise. We give back control and peace of mind
to our customers, including flexibility when things go wrong for them, by varying
repayments and freezing interest charges.
One of our current major challenges is the difficulty of assessing affordability for loans
as many of our customers move to Universal Credit. An unintended consequence
of this government scheme, especially for many part-time workers, is that income
streams become even “lumpier” and more irregular.
For example, a part-time worker doing overtime one month will see an increase in
their wage, and also receive a Universal Credit payment in line with the usual rate.
Next month, however, this payment will decrease – and their pay packet will return
to normal. This level of budgeting requires great restraint in a household where that
little extra in month one would go a long way to making life easier in the short term,
and lumpy income creates a real challenge when it comes to paying the bills.
AT A GLANCE
»COO: Shiona Crichton
»Founded in 2002
»Based in Accrington, Lancashire
»Services: Not-for-profit lending
»No. of employees: 65
»Total value of loans issued to
date is around £80 million
»£9.5 million in saving deposits
BEST PRACTICE REPRESENTATIVE 2019
As more customers make the move
towards Universal Credit, it will also
be harder for new customers to pass
the “know your customer” regulatory
requirements. For customers that often
have neither a driving licence nor
passport, the current benefit award
letter can be key if they want to open
a bank account, apply for loans or use
it for any other number of financial
activities – and the new scheme
provides no such letter. So, one of our
biggest issues at the moment, with 84
per cent of our customers in receipt
of some sort of benefit, is ensuring
that we don’t allow Universal Credit to
exclude from us those that are already
financially excluded elsewhere.
A difficult financial
We believe that this economically
challenging environment, one that’s
especially concerning for many of our
customers, will continue as such for
some time to come. Welfare reform
and increases in the cost of living have
increased financial pressures on lowest-
income households, making it even
harder to have any money for irregular
and unexpected expenses. What our
customers are currently focused on is
the weekly repayment, rather than the
total cost of credit, and as the pressure
on their finances increases, access to
affordable credit will become ever more
The FCA continues to scrutinise the fair
treatment of customers in the high-
cost credit market, which is important.
We do, however, also need to ensure
that there is somewhere for customers
to go for responsible credit, especially
for those who are the most financially
vulnerable. Overall, this increasing
regulatory scrutiny, alongside the
roll-out of Universal Credit, is driving
commercial high-cost lenders to supply
different products to individuals in
higher income brackets which are far
We want to be part of the growth of
the mid-cost credit market, and our
strategic plan for the next three years
is grounded in helping as many low-
income households as possible. We
hope to achieve this by opening up new
ways to access Moneyline’s products,
with the ultimate goal of becoming the
first financial institution for those that
are otherwise excluded.
Over the last five years, we have faced
the challenge of a move from grant
to commercial funding and now run a
financially sustainable operation where
the total income from operations covers
the total cost of delivery without any
material subsidy. Our future growth
will be dependent on our ability to
use equity like investment to leverage
commercial debt, as we have now
outgrown the social investment market.
An adaptive and responsive
Understanding our customers’ changing
needs will be key to our next growth
phase. We are committed to ensuring
that we can offer the products they
want, where and when they want
them. We will continue with face-to-
face lending in the communities where
we operate as long as the customer
desire remains. While an expensive
process, it’s one we believe to be
necessary; our customers are often
excluded from automated decision-
making as they often budget with cash
or can only display an irregular source
of income. We want to work with
like-minded partners going forward, in
the hope that they can facilitate future
lending in the communities that are so
important to us.
We lend based on affordability, not
on a credit score, and we want to
harness new technology, such as open
banking, to make our processes both
efficient and accessible. We believe in
using these impressive developments
for evolution, not revolution, helping to
change the way we assess affordability
in the UK for low-income households.
Above all else, we at Moneyline just
want to continue being part of the
solution, not part of the problem, for
those that are financially excluded.
We need to look like the
One of our
challenges is the
loan terms as
many of our
Rt Hon Kwasi Kwarteng's Foreword For The Parliamentary Review
This year’s Parliamentary Review reflects on a tumultuous and extraordinary year, globally and nationally. As well as being an MP, I am a keen student of history, and I am conscious that 2020 would mark the end of an era. It will be remembered as the year in which we concluded Brexit negotiations and finally left the European Union. Above all, it will be remembered as the year of Covid-19.
In our fight against the pandemic, I am delighted that our vaccination programme is beginning to turn the tide – and I pay tribute to the British businesses, scientists and all those who have helped us to achieve this. But the virus has dealt enormous damage, and we now have a duty to rebuild our economy.
We must ensure that businesses are protected. We have made more than £350 billion available to that end, with grants, business rates relief and our furlough scheme supporting more than 11 million people and jobs in every corner of the country, maintaining livelihoods while easing the pressure on employers. The next step is to work with business to build back better and greener, putting the net zero carbon challenge at the heart of our recovery. This is a complex undertaking, but one which I hope will be recognised as a once in a lifetime opportunity.
Through the prime minister’s ten point plan for a green industrial revolution, we can level up every region of the UK, supporting 250,000 green jobs while we accelerate our progress towards net zero carbon emissions.
With our commitment to raise R&D spending to 2.4% of GDP and the creation of the Advanced Research & Invention Agency, we are empowering our fantastic researchers to take on groundbreaking research, delivering funding with flexibility and speed. With this approach, innovators will be able to work with our traditional industrial heartlands to explore new technologies, and design and manufacture the products on which the future will be built – ready for export around the globe.
And I believe trade will flourish. We are a leading nation in the fight against climate change. As the host of COP26 this year, we have an incredible opportunity to market our low-carbon products and expertise. Our departure from the EU gives us the chance to be a champion of truly global free trade; we have already signed trade deals with more than 60 countries around the world.
As we turn the page and leave 2020 behind, I am excited about the new chapter which Britain is now writing for itself, and for the opportunities which lie ahead of us.